Despite the global economic slowdown in 2020 due to COVID-19, total agricultural lending by U.S. farm banks remained strong at $98.5 billion, decreasing by only 1.8% from the year before according to the American Bankers Association’s annual Farm Bank Performance Report. The report attributed the change to a 6.7% decline in agricultural production loans. By contrast, outstanding loans secured by farmland increased 2.1% to $56.7 billion. According to the report, rising costs, supply and production bottlenecks, price volatility, and a significant increase in federal cash payments depressed demand for agricultural production loans in 2020. Government payments also enabled producers to pay down existing loan balances.
